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Intellia Therapeutics, Inc. (NASDAQ:NTLA) just released its quarterly report and things are looking bullish. Revenues of US$22m beat estimates by a substantial 49% margin. Unfortunately, Intellia Therapeutics also reported a statutory loss of US$0.47 per share, which at least was smaller than the analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
After the latest results, the consensus from Intellia Therapeutics' eleven analysts is for revenues of US$34.1m in 2021, which would reflect a disturbing 45% decline in sales compared to the last year of performance. Losses are forecast to balloon 28% to US$2.90 per share. Before this latest report, the consensus had been expecting revenues of US$38.5m and US$3.01 per share in losses. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue forecasts while also reducing the estimated losses the business will incur.
The consensus price target rose 8.4% to US$35.58, with the analysts increasingly optimistic about shrinking losses, despite the expected decline in sales. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Intellia Therapeutics, with the most bullish analyst valuing it at US$57.50 and the most bearish at US$22.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with the forecast 45% revenue decline a notable change from historical growth of 36% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 21% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Intellia Therapeutics is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. Even so, earnings are more important to the intrinsic value of the business. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn't be too quick to come to a conclusion on Intellia Therapeutics. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Intellia Therapeutics going out to 2024, and you can see them free on our platform here..
Even so, be aware that Intellia Therapeutics is showing 4 warning signs in our investment analysis , and 1 of those is potentially serious...
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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